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N.H. House Speaker O'Brien discusses Legislature's move to ban low-carbon standard

With the New Hampshire Legislature recently moving to prohibit the state from participating in Low Carbon Fuel Standard programs, what are the national implications of the vote? During today's OnPoint, New Hampshire House Speaker William O'Brien (R) discusses the Legislature's action and explains why he believes implementing an LCFS will lead to job losses and higher energy prices. He also discusses the political climate surrounding the vote.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is New Hampshire House Speaker William O'Brien. Speaker O'Brien, thanks for coming on the show.

William O'Brien: Well, thank you for having me on, Monica. I appreciate it.

Monica Trauzzi: Mr. Speaker, the New Hampshire legislature recently passed a bill that would prohibit New Hampshire from participating in any low-carbon fuel standards program. The LCFS is a source of debate throughout the United States. Why the move to remove your state from participating?

William O'Brien: Well, we've had experience in the Regional Greenhouse Gas Initiative for energy rates, RGGI, and we found that what happened there was driving up rates and the funds that were being generated were basically going to what I would call green pork. And more importantly, it was hurting jobs in New Hampshire. New Hampshire has some of the highest energy rates in the country. When we came into the majority in the legislature in 2010, we vowed to the people and we put plans in place to do all we could to bring down those energy rates, because we know that is how jobs are created. This liquid RGGI, which is what we called it, is something that when the governor signed a memorandum saying that the state of New Hampshire was going to be involved in it we immediately filed legislation saying, no, that it is not. So, it's passed in the house, it's before the governor. Now, our hope is that he sees the wisdom of what we did. We'll find out. He might veto it, but we have the votes to override that veto.

Monica Trauzzi: But electricity markets are a very different beast from fuel markets. So, how can you really compare RGGI to the LCFS in determining that it wouldn't be a good economic move for the state?

William O'Brien: Well, I think with the models we saw or showed, it was clearly going to drive up the price of fuel and that's not what we need to do now. I mean we're doing our best to take New Hampshire out of the recession that has been plaguing the country now for a number of years. And we're showing some success. It's through things like this that we've been able to reduce, in the last two years, the unemployment rate in New Hampshire by almost 20 percent. We've gone down to, before adjustments, we are at a 4.9 percent unemployment rate. It is by reducing energy rates, by putting jobs and people ahead of any radical environmental agenda that we're able to realize the successes that we are.

Monica Trauzzi: But the economic analysis done by the Northeast States for Coordinated Air Use Management found that there would be economic benefits to the LCFS if 10 percent of the region's fuel use was through low-carbon fuels. Did that economic analysis weigh in on your decision?

William O'Brien: It was considered, but it didn't persuade us because it's counterintuitive. We really do understand that by imposing a cap and trade regime and causing the cost of fuel to go up that it's going to suppress economic activity. You know, we, in New Hampshire, prize our environment. You know, we have a beautiful state. We have a sea coast and mountains. We want it to remain pristine, but, on the other hand, we have people who are looking for jobs. We have businesses that are trying to grow. We have to seek a better balance than is received or achieved through these cap and trade regimes.

Monica Trauzzi: But isn't the idea here to create this larger market, this regional market that will then keep the prices lower? Are you sort of negatively impacting the surrounding states who are participating by pulling out?

William O'Brien: I don't think so. I think what we're doing is, if we were joined by the other states, is putting in place a market driven fuel market, rather than one that's driven by government. I have yet to see, and I'm certainly not persuaded, that government can do a better job in achieving lower prices than can the market itself.

Monica Trauzzi: California's program is currently on hold after a U.S. District Court decision at the end of last year. So, with action in California against the LCFS and now New Hampshire's action against it, what do you think the national implications are?

William O'Brien: My hope is that as we get out and talk to people and as we begin to show the results of what's happening in New Hampshire, that they'll understand that cap and trade regimes don't work. They'll understand that the free market will respond with producing lower prices and greater availability. You know, throughout the country I think our hope is that they will look at what we're doing in New Hampshire and other states and the economic results of that and they'll say, in the end, those guys got it right.

Monica Trauzzi: Are you cheating New Hampshire consumers though out of being able to be part of this discussion of something that's happening in their region?

William O'Brien: Not at all. What we're doing is advantaging New Hampshire consumers. New Hampshire traditionally has the lowest unemployment rates and the highest indicia of community success and social health in the country. And one of the reasons it does is because we're a low-tax state. We're a state that aggressively tries to support free market solutions, rather than having government regulations. We've departed from that, certainly over the past four years before we came into the majority, but even before that. We're transforming the state because we know that that advantage that has given New Hampshire a much more resilient economy was achieved through avoiding things like the cap and trade regimes.

Monica Trauzzi: Politically it's not a great time overall for passing regulations, pushing regulations. So, how much of this is about politics?

William O'Brien: You know, politics is a reflection of a couple of things. One is what the people desire and we are keeping the promises that we made to lower regulations, to go to smart regulations, to lower taxes, to avoid indirect taxes such as cap and trade programs. So, in a sense, that is politics, but it's politics in the positive sense. It's us keeping our promises that we made. And, certainly, it's politics in the sense that we're getting out there and explaining to people what we're doing. We're pointing them to the results of what we're doing and then we're going to, through elections that are coming up and saying we think we did what we said. We think your instructions were correct. The results have been positive, but give us permission to move forward on it.

Monica Trauzzi: With the price of natural gas so low and gasoline prices as volatile as they are, why doesn't it make sense for the government to sort of nudge things in a certain direction?

William O'Brien: Because the government, when it nudges things, always over nudges them. It doesn't understand the marketplace. You know, this illusion that somehow bureaucrats who haven't run business will understand better what consumer demand is and what prices are and how to produce supply and it just never works out. You know, these examples throughout history where when the government gets involved, when the government puts its thumb on the scale then things go out of kilter. Either there's not enough supply or there's too much demand or the prices don't reflect the cost of a product to society as a whole.

Monica Trauzzi: All right, we'll end it right there. Thank you for coming on the show. Nice to see you.

William O'Brien: Well, thank you.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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